机构真牛逼--AMR长了40倍# Stock
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Forget Internet IPOs: One of the best investments of the past couple of
years was a bankrupt airline.
When American Airlines parent AMR Corp. filed for bankruptcy protection in
November 2011, its stock plunged to 20 cents a share and was soon delisted
from the New York Stock Exchange. The entire company was valued at less than
$90 million -- less than the typical list price of a new passenger jet --
and its executives and lawyers warned shareholders they could be wiped out,
as usually happens in Chapter 11 reorganizations.
Today, as American prepares to close a merger with US Airways Group Inc.,
the stock trades at just below $12, and a small group of investors who bet
on it when it was flying low are poised to reap one of the biggest
bankruptcy windfalls in years. That is thanks in part to a little-noticed
quirk in the deal that means their holdings could translate into much larger
stakes than previously expected in the combined airline, to be called
American Airlines Group Inc.
"We're tickled to death," said Brett Kramer, managing partner of Pinnacle
Investment Advisors, a Tulsa, Okla., firm that manages about $700 million
worth of assets.
Mr. Kramer bought about $50,000 worth of American's shares when they were
trading over the counter for about $1.35 each in February, a few days before
the airline announced its merger. Today, Pinnacle's shares are worth more
than $413,000.
Other big winners could include J.P. Morgan Securities, Solus Alternative
Asset Management LP, Marathon Asset Management LP and Pentwater Capital
Management LP. All held large positions in American's stock at the end of
last year, according to court documents。
For an investor who bought American shares at their lowest closing price two
years ago, the increase of more than 40 times to its current level is the
best return over that period of any U.S.-listed company with a market value
today of at least $300 million, according to a Wall Street Journal analysis
of data from FactSet. "I don't know if we had that expectation on day one,"
American Chief Executive Tom Horton said in an interview. "A lot of people
were counting American out."
Creditors will be repaid in full, so anyone who bought American's debt at a
discount made out well, too.
Many of the investment firms that bought American's depressed stock also
traded in the airline's bonds, some of which went for as low as 15 cents on
the dollar shortly after the company filed for bankruptcy protection.
Creditors usually don't enjoy such outsize financial recoveries in large
bankruptcy cases, let alone get fully repaid with interest.
Still, investors holding American stock are poised for the most
extraordinary gains.
There could be additional upside, because of a complex plan devised by
executives, lawyers and bankers who negotiated American's reorganization and
merger with US Airways. The merger plan allocated 28% of the combined
airline to US Airways shareholders. Based on initial expectations of the
value of the combined company, American's creditors were to get 68.5% of the
new company and American's shareholders 3.5%.
That was already an unusually good outcome for American shareholders. But
the deal provided an opportunity for them to get even more of the combined
company. It estimated American's creditors would be fully repaid, with
interest, if the shares in the new company exceed $15. Above that price, the
plan dictated American's shareholders get the additional value, by
receiving larger portions of the equity in the new company in exchange for
their holdings in the old American.
Shares in the new American are set to start trading Monday, when the merger
closes. American said it expects the merged airline to begin trading at
about the final closing price of US Airways on Friday. US Airways shares
currently trade above $22 -- valuing the combined company at nearly $17
billion.
Based on the merger agreement, if that price stays steady for four months
following the merger's close, American shareholders will ultimately receive
nearly a third of the new company, valued at roughly $5 billion -- nearly 60
times American's value at its nadir.
"That sort of recovery is close to unprecedented," said David Resnick,
president of investment firm Third Avenue Management LLC and a former
Rothschild Inc. banker who advised American early on in its bankruptcy.
years was a bankrupt airline.
When American Airlines parent AMR Corp. filed for bankruptcy protection in
November 2011, its stock plunged to 20 cents a share and was soon delisted
from the New York Stock Exchange. The entire company was valued at less than
$90 million -- less than the typical list price of a new passenger jet --
and its executives and lawyers warned shareholders they could be wiped out,
as usually happens in Chapter 11 reorganizations.
Today, as American prepares to close a merger with US Airways Group Inc.,
the stock trades at just below $12, and a small group of investors who bet
on it when it was flying low are poised to reap one of the biggest
bankruptcy windfalls in years. That is thanks in part to a little-noticed
quirk in the deal that means their holdings could translate into much larger
stakes than previously expected in the combined airline, to be called
American Airlines Group Inc.
"We're tickled to death," said Brett Kramer, managing partner of Pinnacle
Investment Advisors, a Tulsa, Okla., firm that manages about $700 million
worth of assets.
Mr. Kramer bought about $50,000 worth of American's shares when they were
trading over the counter for about $1.35 each in February, a few days before
the airline announced its merger. Today, Pinnacle's shares are worth more
than $413,000.
Other big winners could include J.P. Morgan Securities, Solus Alternative
Asset Management LP, Marathon Asset Management LP and Pentwater Capital
Management LP. All held large positions in American's stock at the end of
last year, according to court documents。
For an investor who bought American shares at their lowest closing price two
years ago, the increase of more than 40 times to its current level is the
best return over that period of any U.S.-listed company with a market value
today of at least $300 million, according to a Wall Street Journal analysis
of data from FactSet. "I don't know if we had that expectation on day one,"
American Chief Executive Tom Horton said in an interview. "A lot of people
were counting American out."
Creditors will be repaid in full, so anyone who bought American's debt at a
discount made out well, too.
Many of the investment firms that bought American's depressed stock also
traded in the airline's bonds, some of which went for as low as 15 cents on
the dollar shortly after the company filed for bankruptcy protection.
Creditors usually don't enjoy such outsize financial recoveries in large
bankruptcy cases, let alone get fully repaid with interest.
Still, investors holding American stock are poised for the most
extraordinary gains.
There could be additional upside, because of a complex plan devised by
executives, lawyers and bankers who negotiated American's reorganization and
merger with US Airways. The merger plan allocated 28% of the combined
airline to US Airways shareholders. Based on initial expectations of the
value of the combined company, American's creditors were to get 68.5% of the
new company and American's shareholders 3.5%.
That was already an unusually good outcome for American shareholders. But
the deal provided an opportunity for them to get even more of the combined
company. It estimated American's creditors would be fully repaid, with
interest, if the shares in the new company exceed $15. Above that price, the
plan dictated American's shareholders get the additional value, by
receiving larger portions of the equity in the new company in exchange for
their holdings in the old American.
Shares in the new American are set to start trading Monday, when the merger
closes. American said it expects the merged airline to begin trading at
about the final closing price of US Airways on Friday. US Airways shares
currently trade above $22 -- valuing the combined company at nearly $17
billion.
Based on the merger agreement, if that price stays steady for four months
following the merger's close, American shareholders will ultimately receive
nearly a third of the new company, valued at roughly $5 billion -- nearly 60
times American's value at its nadir.
"That sort of recovery is close to unprecedented," said David Resnick,
president of investment firm Third Avenue Management LLC and a former
Rothschild Inc. banker who advised American early on in its bankruptcy.
